PRO.MI
Banca Profilo SpA
Price:  
0.17 
EUR
Volume:  
928,298.00
Italy | Capital Markets
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PRO.MI WACC - Weighted Average Cost of Capital

The WACC of Banca Profilo SpA (PRO.MI) is 5.2%.

The Cost of Equity of Banca Profilo SpA (PRO.MI) is 18.10%.
The Cost of Debt of Banca Profilo SpA (PRO.MI) is 5.00%.

Range Selected
Cost of equity 9.30% - 26.90% 18.10%
Tax rate 29.90% - 30.70% 30.30%
Cost of debt 5.00% - 5.00% 5.00%
WACC 4.2% - 6.2% 5.2%
WACC

PRO.MI WACC calculation

Category Low High
Long-term bond rate 3.7% 4.2%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.68 2.39
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.30% 26.90%
Tax rate 29.90% 30.70%
Debt/Equity ratio 7.58 7.58
Cost of debt 5.00% 5.00%
After-tax WACC 4.2% 6.2%
Selected WACC 5.2%

PRO.MI's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for PRO.MI:

cost_of_equity (18.10%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.68) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.